AMD Analysts Cut Price Targets After Chipmaker Lowers Guidance, But 'Long-Term Opportunity' Remains

Zinger Key Points
  • AMD lowers guidance for the third quarter.
  • Analyst are lowering price targets on the updated guidance.

Shares of Advanced Micro Devices, Inc. AMD hit new 52-week lows on Friday after the company came out with lower third-quarter guidance Thursday after the market close.

The company said its third-quarter revenue would hit $5.6 billion, lower than a previous outlook of $6.7 billion.

Here’s a look at what analysts are saying about the lowered guidance from the company.

Related Link: Why AMD Shares Are Falling Friday

The AMD Analysts: Truist Securities analyst William Stein had a Hold rating on AMD and lowered the price target from $107 to $70.

Benchmark analyst Cody Acree had a Buy rating and lowered the price target from $135 to $95.

Raymond James analyst Melissa Fairbanks had a Strong Buy rating and lowered the price target from $130 to $100.

Rosenblatt Securities analyst Hans Mosesmann had a Buy rating and a price target of $200.

KeyBanc Capital Markets analyst John Vinh had an Overweight rating and lowered the price target from $130 to $100.

The AMD Takeaways: Truist Securities' Stein said the lowered guidance from AMD comes at a time that the semiconductor industry is seeing cancellations. The analyst is not overly concerned about the lowered guidance due to weakness in the sector but has a point of caution.

“We are less concerned with Q3’s cyclical dynamics and more concerned with intensifying competitive challenges,” Stein said.

Stein said Intel Corporation INTC and NVIDIA Corporation NVDA present competitive challenges to AMD.

Benchmark's Acree lowered revenue and earnings per share estimates along with lowering the price target. The analyst also saw a continued opportunity for investors.

“With the firm’s share price already suffering to an outsized degree this year, we believe this pre-announcement is already largely priced into the company’s stock and therefore reiterate our Buy rating,” Acree said.

Raymond James' Fairbanks said the lowered guidance for AMD came with weaker client sales consistent with industry data for the sector.

“More importantly, all other business segments — including Datacenter and Embedded — are still tracking in line with expectations,” Fairbanks said.

AMD remained a top pick for Rosenblatt's Mosesmann even after the lowered guidance.

“AMD did not update the full year and given there was no conference call last night it suggests the consumer PC dynamic at end of the year is fluid,” Mosesmann said.

The analyst said the lowered guidance was not a surprise given the environment for consumer PC and PC gaming.

“The reason we see for owning AMD is largely centered on the Data Center and dynamics of massive market share that are as valid today as they were yesterday from our perspective.”

KeyBanc's Vinh said the lowered guidance doesn’t take away from the long-term opportunity for AMD.

“While these results are disappointing, we remain Overweight AMD, as we still anticipate outsized growth long term, led by secular growth and share gains in data center,” Vinh said.

AMD Price Action: AMD shares are down 11.81% to $59.83 on Friday, hitting a new 52-week low as of publication.

Photo: JHVEPhoto via Shutterstock


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